The Long Term Supplier Agreement is essential for businesses seeking to establish stable, long-term supply relationships in Malaysia. It is particularly relevant for companies requiring regular supply of goods or materials where consistency, quality, and security of supply are crucial. The agreement addresses both commercial and operational aspects of the supply relationship, incorporating Malaysian legal requirements and industry-specific regulations. It is commonly used in manufacturing, industrial, and commercial sectors where businesses need to secure reliable supply chains. The document typically includes detailed terms on pricing mechanisms, volume commitments, quality standards, and performance metrics, while providing flexibility to accommodate changes in business needs over time. This type of agreement is crucial for risk management and ensuring compliance with Malaysian regulatory requirements, particularly under the Contracts Act 1950 and related commercial legislation.
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1. Parties: Identification of the supplier and customer, including full legal names, registration numbers, and registered addresses
2. Background: Context of the agreement, relationship between parties, and purpose of the long-term supply arrangement
3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and hierarchy of documents
4. Supply Obligations: Core obligations of supplier, including quality standards, quantities, and delivery requirements
5. Term and Renewal: Duration of agreement, renewal options, and notice periods
6. Ordering Process: Procedures for placing and accepting orders, lead times, and order modifications
7. Pricing and Payment: Price structure, payment terms, invoicing requirements, and price adjustment mechanisms
8. Delivery and Acceptance: Delivery terms, acceptance procedures, and transfer of risk and title
9. Quality Requirements: Quality standards, specifications, testing procedures, and quality control processes
10. Warranties: Supplier warranties regarding products, compliance with laws, and general warranties
11. Liability and Indemnity: Limitation of liability, indemnification obligations, and insurance requirements
12. Confidentiality: Protection of confidential information and trade secrets
13. Force Majeure: Events constituting force majeure and consequences
14. Termination: Termination rights, grounds for termination, and consequences of termination
15. General Provisions: Standard boilerplate clauses including notices, assignment, and governing law
1. Intellectual Property Rights: Include when supply involves licensed technology, branded products, or IP rights
2. Compliance with Laws: Detailed section needed when industry-specific regulations apply or for regulated products
3. Environmental Requirements: Include for supplies involving environmental considerations or hazardous materials
4. Business Continuity: Important for critical supplies or when customer requires backup supply arrangements
5. Key Performance Indicators: Include when specific performance metrics will be tracked
6. Anti-Corruption: Detailed section needed for high-risk jurisdictions or government-related contracts
7. Data Protection: Required when personal data processing is involved
8. Import/Export Compliance: Include for international supply arrangements
9. Change Control: Important for technical products or where specifications may change frequently
1. Schedule 1 - Products and Specifications: Detailed list of products, technical specifications, and quality standards
2. Schedule 2 - Pricing Schedule: Detailed pricing structure, including any volume discounts or pricing mechanisms
3. Schedule 3 - Service Levels: Performance metrics, KPIs, and associated remedies or penalties
4. Schedule 4 - Order and Delivery Process: Detailed procedures for ordering, minimum order quantities, and delivery requirements
5. Schedule 5 - Quality Control Procedures: Detailed quality control processes, testing requirements, and acceptance criteria
6. Schedule 6 - Key Contacts: List of key personnel and escalation procedures
7. Appendix A - Form of Purchase Order: Standard form for placing orders under the agreement
8. Appendix B - Technical Documentation: Product manuals, safety data sheets, or other technical documentation
9. Appendix C - Compliance Certificates: Required certifications, permits, or compliance documentation
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